Q: MDA falling fast, lawsuit, what to do now?
Thank you.
Thank you.
5i Research Answer:
We are not lawyers, but this lawsuit will be very hard to prove, and take years to work its way through the system. Essentially, it claims MDA 'should have known' SATS was going to cancel their contract. There was some prior knowledge of FCC disputes, but this in no way means MDA knew exactly what their customer was going to do (it ended up selling spectrum and this allowed it out of the contract). The impact is likely in the stock decline, and subsequent (positive) news should offset some of the negative sentiment impact due to the lawsuit. We would not react to this news.